Analysis of Politics, Philosophy and Economics from a Marxist Perspective

Wednesday, 20 April 2016

The Danger of Brexit

If the current opinion polls are to be believed, the likely outcome of the EU Referendum is that Britain will leave the EU. It will lead to a carnival of reaction.

According to most of the polls, opinion is split more or less evenly between leave and remain. In some telephone polls, which were more accurate in the General Election, there is still a significant majority for remain. The trouble is that, because this vote is being undertaken as a separate event, the turnout is likely to be low.

In the case of the Scottish referendum, passions were high, on both sides. On one side, nationalist sentiment had been built up over a prolonged period,, on the grounds that all of Scotland's problems were a consequence not of capitalism, but of Westminster. On the other side, it was not difficult to whip up fears of what might befall a tiny Scottish nation, cut adrift from its more than 300 year long union with the rest of Britain. Moreover, by and large, the media reinforced this fear factor.

The more it looked like the nationalists would turn out to vote, the more their frightened opponents were encouraged to do the same. That is not the case with the EU referendum. On the one hand, nationalists make all the same spurious and reactionary claims that they did in the case of Scottish independence. They suggest that the problems of Britain are not a consequence of capitalism, and more immediately, the austerity measures undertaken by the Tory government, but of Brussels; they imply that British capital is somehow better than EU capital; they imply that British 'democracy' is somehow better than EU 'democracy', and so on.

The trouble is that, although all of this is quite clearly nonsense, as it was in the case of Scottish independence, it is a nonsense that large numbers of British people have been conditioned to believe over decades, if not centuries. A Scotland that has been an equal partner with England, during 300 years of British imperialism, has been, thereby, equally conditioned into a belief in the innate superiority of Britain, and its component parts, as the people of England and Wales.

The most ridiculous manifestation of that imperial past are the comments about an independent Britain fostering, once again, its economic links with the Commonwealth. But, Canada is part of NAFTA. There is no chance that Britain is going to replace the US and Mexico as Canada's most important partners. India is developing into a large economic power, in its own right, similar to the US or China, and India is not going to base its economic future on ties with the tiny British economy, compared to its relations with China, ASEA, the US, and indeed the EU. The same is true of Australia, whose economic fortunes are already tied to China, which it provides with large quantities of food and primary products. As for Africa, the dominant player there is already China, and African countries themselves have recognised the historical necessity of larger economic and political structures, like the EU. Already, a number of African economic blocs have been created, with the intention of creating an African equivalent of the EU, in the next couple of decades.

But, unlike the Scottish referendum, there is very little in the media about the reality of the current global economic and political situation. To do so would be to contradict the narrative that media has presented for the last thirty years.

As unemployment rose, in the 1980's, and then remained high, it was not surprising that the Tory media should explain it by claiming that, overnight, 3 million people, who previously had been in gainful employment, had become 'scroungers', happy to draw the dole and live their lives on benefits. It wasn't just the gutter press that spewed out this bile. The BBC runs its disgraceful “Saints and Scroungers” garbage, whilst Channel 4 ran “Benefits Street”.

Being able to further explain that on the basis that many of these scroungers were, in fact, foreigners who were rushing to Britain, where, as soon as they arrived, they were given £1 million luxury houses to live in, along with free cars, and without even the need to pass a driving test, all added grist to the mill. The frightening thing is that so many people actually believed all this rubbish alongside the stories such as “Freddie Starr Ate My Hamster”!

For decades, the media have spewed out a continual stream of such bilge, including all the ridiculous stories about EU regulations requiring bananas to be straightened, and so on, presenting every regulation protecting workers rights and health and safety as somehow an absurdity. Yet, the reality is that there continues to be millions of workers living on poverty wages, working all hours of the day, in poor conditions, and there are hundreds of workers killed each year in industrial accidents with thousands more injured or suffering severe illness due to unsafe and unhealthy working conditions.

And, of course, you only have to listen to Farage and Bojo, and their ilk amongst the Tory Right, to know that it is to go even further down that route, of attacking basic workers' rights, which is their real reason for wanting to leave the EU. If Britain leaves the EU it will lead to a carnival of reaction, as such people go on the rampage.

Much as with the British victory in the Falklands led Thatcher to drape herself in the flag, in her attacks on steel workers, rail workers and then the miners, describing them as “the enemy within”, a vote for Brexit, will be the starting gun for such people to launch a drive to turn the clock back. That is why the idea presented by the CPGB, that workers should just stand aside from the referendum is quite honestly bonkers. They complain about "Economism", but their abstention here is a classic instance of such Economism. Its revealing that the Brexiters chose Stoke as their first major venue for a rally, given that it was here, only a few years ago, when it looked possible for the BNP to win the vote for the Mayor, and where they had a large number of councillors.

But, that too indicates the danger of Brexit in the referendum. Some years ago, when many people were getting over excited about the success of the BNP in elections, I pointed out that their success was only a function of very low polls. In fact, with the election of 2010, they got swatted, because whilst their hard core of fanatical supporters could have an impact, in elections where turnout was only 25%, or less, in polls of 70%, their vote did not rise, and so their share of the vote collapsed. The same has been true of UKIP.

But, the EU referendum is also likely to be a low poll. It is not only being held as an independent poll, at a time when many people will be more concerned with organising their Summer holidays, but its being held just a few weeks after people have already been out to vote in mayoral and council elections.

If the turnout is similar to a General Election, of around 70%, the remain camp is likely to win, but such a turnout is unlikely. If the turnout is more like that for the European Parliament elections, the leave camp will win by a wide margin, for the simple reason that the fanatical nationalists will turn out to vote, whereas the unenthused opponents of Brexit may not.

That is why Cameron and Osborne's “Project Fear” is unlikely to work. How could it? For decades, the Tory media have fed the public a diet of lies about the EU, and promises of how Britain would be a land of milk and honey if it left. The Tory Party, since the early 1990's, has portrayed a similar picture.

As Paul Mason pointed out yesterday, on the Daily Politics, Cameron's reform and renegotiation was not premised on Britain being further integrated into the EU, as the basis of future progress, but on Britain becoming even more separate from it. Just weeks ago, Cameron and Osborne were themselves saying that unless the EU allowed Britain to separate itself even more from the EU, they would advocate leaving. Yet now they want to argue that leaving, under any circumstances, would be a disaster.

And leaving would be a disaster, for workers, but that fact is not credible, now, when it comes out of the mouths of Cam-borne. Moreover, the situation is not the same as in 1975. Then the media were unanimously in favour of staying in the EEC. Today, they have had to stick with their twenty year long line of opposing it. In the 1960's, Britain repeatedly tried to get into the EEC, but was blocked by De Gaulle. Given the behaviour of Britain since it joined, you can understand DeGaulle's opposition. But, having been allowed in in 1973, the 1975 Referendum was always likely to be in favour of staying, especially as the establishment saw the major forces of opposition coming from the left, whose victory would have created uncertainty. Indeed, Wilson later admitted that his main reason for supporting staying in the EEC was actually a fear of what a victory for Benn, Foot and the others around them would have meant.

But, that is not the case today. Aside from a handful of people in sects like the SPEW and SWP, and Stalinoid demagogues like Galloway, there is no support for Brexit amongst the vast majority of the left, the Labour Party, and trades unions. In fact, the Tory media have to distort the words and actions of Corbyn even more than usual to try to portray a picture in which he is not presenting his true feelings.

Cam-borne and UK capital is in a bind. Cam-borne used the referendum gambit to placate the right-wing of the Tory Party, in the belief that they would be in government with the Liberals, who would give them the cover to ditch it. But, with the demise of the Liberals, as I'd predicted at the start of 2015, Cam-borne lost their cover.

They cannot offer a positive vision of a future in the EU, because that contradicts everything they have said and done for years, including during the farcical renegotiations. Rather they have been opposing all of those elements of the EU which could have offered a brighter future for all European workers, including those in Britain.

They have opposed all of those proposals for greater regulation and economic planning across Europe that could have provided the basis of a solution for the steel industry, for example. Whilst they have said that logically the Eurozone requires greater political and fiscal integration – which it does – they have stressed that the UK should want no part of it.

As Paul Mason pointed out yesterday, whatever the result of the referendum, Brexit would inevitably occur, because the EU will rapidly become that more politically integrated Eurozone, and the UK will be outside it.

When it comes to the Eurozone itself, all of the narrative has again been about how lucky the UK has been not to be part of it. Yet, that did not affect the crisis that hit the UK in 2008/9. The recovery from that was not a consequence of being outside the Eurozone, but of the fact that Gordon Brown introduced measures of fiscal stimulus. Similarly, the problems that have affected Greece, Spain, Portugal, Ireland and so on are not the result of them using bits of paper with € symbols stamped on them rather than £'s, or ₣'s and so on as the standard measures of value. The problems of those economies, as with the problems of the UK economy, between 2010-2014, stem from the imposition of fiscal austerity, and a failure to provide the necessary encouragement for investment in a range of European countries.

A far brighter future for all European workers, including those in Britain, could be provided by a United States of Europe, with a single currency, a single state standing behind it, and with appropriate measures of fiscal stimulus to promote economic growth. But, of course, Cam-borne cannot offer such a vision, because it runs completely opposite to their conservative ideology.

If UK workers are to be enthused to vote to stay in Europe, it can only be on the basis of such a positive future. But, the Blairites are also not likely to offer such a positive view, because for the last twenty years they too have adopted much of the conservative world view of Cam-borne.

As I argued several years ago, rather than openly confronting all of those reactionary ideas held by sections of capital, progress has been made by bureaucratic fudge. Indeed, it is that which has led to the democratic deficit both in the EU and within the British state – where, for example, we still have all the remnants and relics of feudalism, such as the Monarchy and House of Lords.

It is the failure to undertake that political struggle against reactionary sections of capital and landed property, that now leaves industrial capital, in Britain, with the disturbing prospect of Brexit. Such an event will cause further reactionary consequences.

The Brexiters put forward the ridiculous notion that Britain outside the EU would get a better deal than if it remained in. Had Scotland voted to leave Britain, its likely that England would have done everything it could to make Scotland pay the price, so as to force them to apply to come back. Already, the prospect of Scottish independence had led to ridiculous calls for Yorkshire independence and so on.

If Britain leaves the EU, it would lead to nationalists, elsewhere in the EU, raising similar demands. The EU would have every reason to oppose those calls by using an independent Britain as a whipping boy, to show what would happen. It would be simple political logic for the EU to defend its own remaining unity by making Britain into an outcast, a leper economy, cast adrift.

Under such conditions, its not that companies already in the UK would leave, but that others would not come, and that existing large companies would not add to their investments. As I pointed out a while ago, its not a matter of whether the EU imposed tariffs on UK goods and services, though they probably would, but that companies based in the EU would have all the benefits of scale that derive from it. It would be a matter of the UK trade deficit exploding, as goods and services produced in the EU undercut and overwhelmed those produced in the UK.

The surge in the trade deficit would lead to large outflows of capital in exchange, and a collapse in the value of the Pound. In turn, that would push up import prices causing inflation to rise, and living standards to fall. As inflation rose, bond prices would fall pushing up interest rates, which would cause a collapse of the stock market and property market.

Yet, as things stand, a vote for Brexit now looks likely. Cameron will go down in history as the Prime Minister who destroyed the British economy purely for the sake of his own short term political convenience.

About Me

Left school at 16. Became an ASTMS shop steward at 19, and a lifelong trade union activist. Delegate to North Staffs Trades Council 1974-87. Secretary North Staffs Miners Support Committee 1984-5. President North Staffs Trades Council 1985-6 and 1986-7. Delegate to Staffordshire Association of Trades Councils 1985-7. Delegate West Midlands Regional Council of the TUC 1985-7. Secretary Newcastle UNISON 2000-2.
Member of the International Communist League/Workers Socialist League 1974-87.
Went to University as mature student at age of 24. Obtained Joint Honours Degree in Economics and Politics with Philosophy and Statistics, followed by a Post Graduate Certificate in Education.
Labour Party member since 1974. Stoke City Councillor 1983-4, expelled from Labour group 1983, and resigned from Council in 1984 because of refusing to vote for rent and rate rises, and budget cuts. Staffordshire County Councillor 1997-2005.
Assistant Secretary Stoke District Labour Party 1981, and held pretty much every position from Executive member, to Branch Secretary, and Branch Chair.